For more on this part of the insurance industry:
1. visit our farm insurance page for a look at all products in this sector
2. or focus in on all of the crop insurance products available on IB Markets!
Crop insurance is a financial safety net that shields farmers from unexpected losses due to weather, pests, and more. It helps farmers bounce back from these losses by covering:
Canada is a leading producer of wheat, canola, and barley. There is also growing interest in soybeans, lentils, and specialty crops like quinoa and hemp. Farmers rely on insurance to safeguard both traditional and new agricultural investments.
Severe wildfires in British Columbia and Alberta in 2023 destroyed thousands of acres of farmland. Fortunately, many farmers with insurance were able to recover from large expenses.
Those without crop insurance faced financial ruin. This event proved the need for wildfire protection, which has now been added to some farm coverage plans.
Farmers use GPS mapping and remote sensing to improve yield predictions and insurance claims. Policies now cover climate-resistant crops and reward eco-friendly farming.
While government funding for risk management is increasing, some threats are also emerging in the Canadian crop insurance sector:
unpredictable seasonal shifts: warmer winters and late frosts disrupt planting and harvest timing
soil degradation and erosion: extreme weather and intensive farming reduce soil fertility, lowering yields
rising pest infestations: warmer temperatures expand pest populations like grasshoppers and aphids, increasing crop damage
Fungal infections and crop diseases are rising, leading to sudden claims. Clients need policies for disease coverage and accurate predictive models. Brokers can navigate the farm insurance page for more options for agriculture-related protection.
yield coverage: pays if a farmer’s harvest is lower than expected due to weather, pests, or disease
revenue protection: covers losses if crop prices drop or yields decrease
weather insurance: pays out when drought, heavy rain, or heat damage crops
Picking the right policy aids in safeguarding their income and long-term farm sustainability.
In Canada, multi-peril crop insurance (MPCI) is the most common type. It shields farmers against setbacks caused by drought, floods, frost, and disease.
This government-backed program helps stabilize farm income when crops are damaged.
Farmers can also choose from other insurance options for their crops:
hail and fire insurance: covers impact from hailstorms and fires
weather-based insurance: pays out if drought, heat, or excess rain damages crops
revenue protection insurance: helps when crop prices drop or yields decrease
specialty crop insurance: designed for high-value or unique crops
These options allow farmers to find the right coverage for their specific hazards.
Insurance for crops in Canada is offered by both government programs and private insurers. The AgriInsurance Program is a government-backed plan that supports farmers in protecting their crops. It is funded by federal, provincial, and producer contributions.
Each province runs its own insurance program for crops:
Private insurers, like The Co-operators, also offer similar insurance options. This mix of public and private plans gives Canadian farmers flexible coverage and economic security.
Crop insurance secures different types of farmers and agricultural businesses against financial hits. The following groups benefit from coverage:
It supports all farm sizes by reducing monetary concerns. Large farms protect major investments, while small farms ensure stability. Specialty and organic farms can get tailored coverage for their unique challenges.
It pays farmers a percentage of their losses when crops are damaged. The amount depends on the policy and level of coverage chosen.
For instance, most farmers in Saskatchewan select 80 percent coverage. This means that their insurance covers 80 percent of their insured yield or revenue.
Each province runs its own crop insurance program, so coverage and payouts differ. Some policies cover more hazards or offer higher payouts than others. Farmers should check with their provincial provider to understand their coverage options.
